RBI’s firm stand on repo rates in its announcement in August 2015 has failed to damped the spirit of the Indian auto industry. While industry leaders see growth coming from passenger vehicles (cars and utility vehicles) and commercial vehicles (M&HCVs), the rate of growth is estimated to be in single digits. A slump in rural demand hitting two-wheeler growth, CV sales growth is expected to be based on replacement demand at the cargo end for some more time yet. The improvement in efficiency and quality the industry has been working upon will bear fruits, claim industry sources. They adds that maintaining global standards will help to expand export opportunities. With the next wave of CV sector growth expected to come from infra and mining projects getting back on track, industry leaders have also stressed on the need for agriculture to pickup.

With the likelihood of RBI cutting repo rates ahead of the festive season, and on the emergence of actionable data prints, programmes like FAME are also expected to attract investment in the area of hybrid and alternate fuel commercial vehicles in the form of a PPP model. Said V S Parthasarathy, Group CFO, Mahindra & Mahindra Ltd, “The absence of RBI rate action was on expected and understandable lines.

That inflation is estimated to be on track, the supply side is still constrained, the exports are vulnerable and the banks are suffering from low credit off take, offered an alternate scenario for an ‘unexpected’ rate cut action. In the event, we are content in deriving comfort that RBI is poised for accommodative action as soon as actionable data prints emerge.”